UK’s ThirdFort gets $20 million for tools to help with identity verification and detect money laundering and payment fraud – TechCrunch

Money laundering has been a hot topic lately in the UK, which faces pressure to not only establish stricter rules to trace the origins of money spent on big assets in the country like the prime real estate – the capital has been dubbed by some as the “laundry of London” – but also, in light of sanctions against Russia in recent weeks, actually to enforce those rules.

Today, a London-based startup called Thirdfort, which has built a platform to help professional services firms carry out further due diligence and report anything suspicious, announces a £15m funding round ( approximately $20 million), money that it will use to continue to expand its services, in particular to build payment infrastructure directly into its platform.

The raise, a Series A, was led by Breega, with B2B fintech-focused Element Ventures also investing, as well as ComplyAdvantage founders Tessian, Fenergo, R3, Funding Circle and Fidel.

CEO Olly Thornton-Berry said he and Jack Bidgood came up with the idea for Thirdfort after a friend of theirs lost £25,000 buying a flat in London due to an attack by phishing: the scammers had collected data about the deal and created a domain similar to that of the law firm the friend was using for the purchase, and with that wrote an email posing as the lawyer from the friend, requesting that the sum be transferred via a link. It wasn’t until weeks later that the friend was legitimately asked for the same amount that they all began to suspect foul play. The friend never got that money back.

The incident, Thornton-Berry said, underscored how little information the two professional services firms require of a client before entering into a business transaction, and how little protection the client has against attempts more sophisticated fraud.

This led to Thirdfort, which provides a big data toolkit of multiple resources such as data from LexisNexis, ComplyAdvantage, Companies House and more that can be aggregated (and chosen by the client) to provide different data points on individuals and their sources of money. . Thirdfort first built tools to meet the needs of businesses in the legal and real estate markets.

The product is now available in two parts. First, there is the “risk engine” designed for its professional clients, which can be used for both KYC (know your customer) checks and to help businesses comply with anti-money laundering regulations. Around 700 companies are already using the platform, including law firms DAC Beachcroft, Penningtons Manche Cooper and Mishcon de Reya; and real estate firms Knight Frank, Strutt & Parker and Winkworth.

Secondly, there is an application designed for the consumer customers of these companies which has been built on an open banking infrastructure to connect these companies to the customer’s bank, through the banks’ own banking applications, to make payments seamlessly. secure. . This has now been downloaded some 500,000 times.

Similar to Alloy in the US (which is a potential competitor, if one grows in the other’s market), the argument here with Thirdfort is that the work that should have gone into performing a similar search on the identification and origin of funds would primarily have been time-consuming, largely manual, and expensive to perform, if performed at all. Times are changing now and companies are now being required to do more of this work.

“Now what’s needed is a lot more,” Thornton-Berry said. “They have to do a thorough level of due diligence, seeing bank statements of what’s coming in and going out, asking specific questions of customers, checking due diligence on the money being offered if the sum is specified as a gift. It is a whole new type of workflow that has emerged with the rise of AML. »

And while Thirdfort’s primary focus today is fraud detection — it’s successfully stopped a dozen questionable transactions for its clients, Thornton-Barry said — it’s also designed for AML due diligence and compliance regulations and will probably come into their own when they are implemented more widely. , especially around all major transactions involving international money.

“For consumers and professional services, the risk of fraud and the need for compliance poses an enormous burden,” Maxence Drummond, director of Breega, said in a statement. “Consumers need to be verified for every transaction, and regulated professionals spend too much of their valuable time on customer verification and compliance.

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